2.25.2012
Mexico: Better places to travel
Excerpts:
... the State Department does urge Americans to avoid nonessential travel to Ciudad Juárez, where more than 3,100 people got killed in 2010. (On a positive note, the number did plummet to a paltry 1,933 in 2011.) Government officials also advise steering clear (if possible) of Coahuila, Durango, San Luis Potosí and most of Sinaloa, and to confine excursions in Mazatlán to well-traveled tourist areas like the Zona Dorada. Elsewhere, travelers to the cities of Acapulco, Ixtapa and Zihuatanejo are advised to exercise caution, stick to the principal tourist areas and avoid driving after sundown on some main highways. But other than that, the cheerleaders proclaim, Mexico seems to be A-OK.
OK, call me a fussbudget, an old stick-in-the-mud, but when I go on vacation I like to visit countries where the exchange rate is good, the food is reasonably priced and my chances of being brutally murdered are fairly minimal. France and England fit the bill nicely, not only because of the low homicide rates but because of all the cathedrals and museums. I also enjoy the Netherlands and Australia, where machete massacres are a rarity.
But not everybody can afford to go abroad. So, if money is an issue, Canada is another viable option. It's close at hand, the people are incredibly friendly, and it's been years since 3,100 people got killed in a single year in any of its major cities. Sure, Calgary can get a little rough after sundown, but nothing like Ciudad Juárez.Comment: We used to love going to Mexico. A friend has 3 time share weeks there.
2.24.2012
The "Bennett Effect" and why College Education costs have tripled
Recipients of federal Pell Grants have, by definition, limited means to pay for college, so they are likely to qualify for grants and price breaks given out by schools, too. But schools view a student's sources of federal aid before deciding how much to give on their own, rather than the other way around. The result is a crowding out effect, where some schools give less as the government gives more.
Lesley Turner, a PhD candidate at Columbia University, looked at data on aid from 1996 to 2008 and calculated that, on average, schools increased Pell Grant recipients' prices by $17 in response to every $100 of Pell Grant aid. More selective nonprofit schools' response was largest and these schools raised prices by $66 for every $100 of Pell Grant aid.
Aid from schools over the past decade has increased about half as fast as federal aid, according to the College Board.
Perhaps worse for students than a crowding out effect is the Bennett Effect, named for William Bennett, who 25 years ago as Secretary of Education wrote for the New York Times, "Increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions."
If subsidies puff up buying power and shift prices higher, as economics courses teach, could federal aid for college help create an affordability problem? After all, the federal government began spending more on college aid with the Higher Education Act of 1965 and the full funding of Pell Grants in 1975. Since 1979, tuition and fees have tripled after adjusting for inflation. That's much faster than the increase for real estate and teacher pay.Comment: Image source: Unintended Consequences of Health Reform
Triple Ouch!
I suffered two injuries playing pool today:
- The tip of my thumb was at the edge of the corner pocket. Brother drilled one home and it bounced off my nail. Ouch! Still stinging 2 hours later. A bruise under the nail is developing
- I bounced the cue ball off the table and it landed on the top of my foot. I was in my stocking feet. Double ouch!
- Plus I lost to Brother at 9 ball! Triple ouch!
2.23.2012
IRS: Tax Refund Delays
Excerpt:
Tax preparers said Thursday that the Internal Revenue Service is continuing to have delays in sending federal tax refunds this year, with hundreds of South Floridians complaining they still haven't gotten their check.
"Our phone is ringing off the hook with people saying they should have their refund by now," said Mark Daly, franchise owner of several Jackson-Hewitt Tax Service outlets in South Florida.
"There's no rhyme or reason why some returns are being quickly processed and others not," Daly added. "We've had hundreds and hundreds of complaints."
"The IRS is experiencing delays this year in sending refunds," said H&R spokesman Gene King in a statement sent Thursday to the Sun Sentinel. "Based on current IRS guidance, most refunds are now issued from the IRS in 10 to 21 days."Comment: IRS website still reports that my refund will be deposited on 2/21 ....
Vikings Stadium: Make Wimpy Pay!
Excerpt:
Saying that they had the only Minnesota Vikings stadium plan that could pass the Legislature, three Republican senators offered a plan Thursday that would limit any direct public subsidy to the team to a $300 million loan.
The proposal -- which the Vikings and Gov. Mark Dayton quickly dismissed -- took the stadium debate at the state Capitol in an entirely different direction: Arguing that the team should only be offered minimal assistance and nothing beyond what other businesses could expect.
The three senators, led by Sen. Roger Chamberlain, R-Lino Lakes, said that the state should not be involved in whether the stadium had “gold-plated tile” and needed to cost $1 billion.
The Legislature “shouldn’t have an interest in whether they build a stadium with a roof or astro-turf, or how many suites they have, or whether it’s in Ramsey County,” said Sen. David Hann, R-Eden Prairie, a co-author of the proposal. “Those are things that the business itself ought to work out with local communities who have interest in hosting that site.”Comments: My view. Make Zygi Wilf (Wimpy!) pay for it! Color image from No More Wimpy Government. Info on the sponger Wimpy here!
2.22.2012
'Sock it to Me' - slamming all Dividend investors!
Excerpts:
Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.
Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.
... shareholders of all incomes will share the pain. Here's why. Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax.
... Who would get hurt? IRS data show that retirees and near-retirees who depend on dividend income would be hit especially hard. Almost three of four dividend payments go to those over the age of 55, and more than half go to those older than 65, according to IRS data.
But all American shareholders would lose. Higher dividend and capital gains taxes make stocks less valuable. A share of stock is worth the discounted present value of the future earnings stream after taxes. Stock prices would fall over time to adjust to the new after-tax rate of return. And if investors become convinced later this year that dividend and capital gains taxes are going way up on January 1, some investors are likely to sell shares ahead of paying these higher rates.
The question is how this helps anyone. According to the Investment Company Institute, about 51% of adults own stock directly or through mutual funds, which is more than 100 million shareholders. Tens of millions more own stocks through pension funds. Why would the White House endorse a policy that will make these households poorer? Seldom has there been a clearer example of a policy that is supposed to soak the rich but will drench almost all American families.
Comment: To continue with Laugh In theme ... if Obama is re-elected ... "you bet your bippy"
IRS Refund: Missed that date!
"You should receive your refund by February 21, 2012"
Comment: IRS Where's My Refund site. Calling the IRS is like (well ... dealing with Comcast!). Finally got ahold of a very kind woman who said they had not begun to process my return yet. I wanted to ask ... why does the website say that my refund would be here yesterday ... but I knew she wouldn't have the answer!
2.21.2012
Match Heads
Iran: Pre-emptive strike against enemies possible
Excerpt:
A senior Iranian military commander signaled the Islamic Republic might launch a pre-emptive strike against its "enemies" if the nation's leaders felt an attack on Iran was imminent, providing another example of ever-escalating tensions between Tehran and the West over its nuclear program.
In a clear shot across the bow, the deputy head of Iran's armed forces, Mohammad Hejazi, told state media on Tuesday: "Our strategy now is that if we feel our enemies want to endanger Iran's national interests, and want to decide to do that, we will act without waiting for their actions," according to the Reuters news agency.
Hejazi's comments come as another Iranian official said that a U.N. team visiting Iran has no plans to inspect the country's nuclear facilities and will only hold talks with officials in Tehran.Israel Needs A Preemptive Nuclear Strike Against Iran
Excerpt:
One of the best ways to ensure the world doesn’t get wobbly over Iran, is to make it understand that although Israel prefers to regard the rogue Islamic regime as an international problem, we will, if necessary, do whatever it takes to ensure our survival, including a preemptive nuclear strike.Comment: Images from Wiki: Matches. When you have two sides each suggesting a pre-emptive strike ... .well "match heads"
2.20.2012
Adventures with Comcast
I downloaded the App and it asked me to authenticate my account. I entered my Comcast user ID and password and did the submit.
NOTHING happened .... or did it
Kathee was at the dining room table working on a review on her company HP laptop (Windows 7). She was uploading a saved file. My MacBook lost Interet connectivity as well. And the IPAD basically froze up! Fun stuff.
My son had just arrived for dinner so we took a dinner break. I ate quickly and left the table before the others. I called Comcast tech support.
Comcast denies that there is a link between their IPAD app and the resulting problem but this is my hypothesis and I believe that the evidence is strong.
I turned out working with Comcast tech support from 6 until 9 and then from 10:30 until 11 when I gave up from exhaustion. During that time:
- I talked to (I lost track but I estimate 5-8) different reps. James, Grechen, Vernon and Chuck come to mind.
- All were kind and generally helpful except for Chuck who blamed the problem on my NetGear Router
- Finally after multiple resets of the Motorola Comcast provided cable modem; system reboots (2 MacBooks, 1 Linux), and the NetGear we were at the point that I had internet connectivity directly connected to the Motorola cable modem.
- Comcast had sent two cookies (we could see this as we examined the cookies on Kathees' MacBook) that forced the browser homepage to go to an Xfinity authentication page. I don't have a screen shot of this as we were busy doing other things. Entering an account # and phone # and then a submit lead to a page that said that connectivity could not be established
- If we deleted the cookie ... and rebooted the MacBook and opened the brower ... the cookie was again implanted! And we could not access the Internet again. Back to the Xfinity authentication page
- Interestingly I could on-line chat with a Comcast tech person.
- I gave up at 11:00 ... my mind and body were exhausted. A Saturday night of family time was wasted and I was ready for bed.
- In the night I talked in my sleep about the Comcast router. Kathee did not record it or transcribe it but obvously it was on my mind
- On "joke" in this was Chuck's contention that it was my wireless router's problem and that the issue was mine and not there's. Also a denial of the obvious link between the IPAD authentication step and the cookie being passed down to our systems.
- Kathee had to work the final Wachovia / Wells Fargo conversion event this weekend and so was downtown until 12:30 on Sunday
- I had a lot of time to think the whole issue over:
- I had one wired working Internet connection directly connected to the Comcast modem.
- But wireless did not work and even connecting the NetGear up did not work. The cookie was again being passed and we were in that authentication loop again.
- Where was that cookie coming from?
- I seriously thought (my son suggested this) dumping Comcast and going with Century Link.
- I also thought that perhaps this mess fried my NetGear.
- Then I had an idea that is simple and proved to be the solution
- Kathee straightened out a paper clip and used the end to reset the NetGreat router. (It had been powered off for hours ... but the reset returns it to factory settings)
- My hypothesis is that there is a PROM in the Router that was retaining the cookies
- Well when we did the hard-reset everything cleared up and we were back in business!
2.16.2012
Convention Center white elephants
Excerpt:
For two decades, America's convention center business has been declining, resulting in a nationwide surplus of empty meeting facilities, struggling convention halls and vacant hotel rooms. How have governments responded to this glut? By building more convention centers, of course, financed by debt backed by new taxes and fees on already struggling taxpayers.
Back in 2007, before the recession began, a report from Destination Marketing Association International described America's convention industry as a "buyer's market" suffering excess capacity. It's only gotten worse, attracting just 86 million attendees in 2010, compared to 126 million in 2000. Meanwhile, the amount of convention space angling for business has increased to 70 million square feet, up from 53 million in 2000 and 40 million two decades ago.
That's largely because governments refuse to stop making convention centers bigger and hotels even more dazzling, arguing that whatever business remains will flow to the places with the fanciest amenities. To finance these risky projects—which the private sector won't build by itself—cities float debt backed by new taxes and fees on already struggling taxpayers. As Charles Chieppo, a former board member of Massachusetts Convention Center Authority, lamented last year, "Logic rarely has a place in the convention business."Rybak: Eliminating city convention taxes would 'wreck everything'
Excerpt:
The mayor also disputed reports that a city agreement to help pay for a nearly $1 billion Vikings stadium was complete. Mondale, said the mayor, “doesn’t speak for the city of Minneapolis.”
David’s proposal, which was debated but not voted on Thursday, would eliminate the citywide half-cent sales tax in Minneapolis, a 2.625 percent lodging tax in the city, a 3 percent downtown liquor and beer tax and a 3 percent food and beverage tax in downtown Minneapolis.
“This would wreck everything,” Rybak said of the convention center’s reliance on the taxes.
But some legislators, especially Republicans, argued that Minneapolis was funding its convention center with a series of taxes that convention centers in outstate Minnesota did not impose. “I’m just curious why you should get that extra, special attention,” said Rep. Sarah Anderson, R-Plymouth.
“You know who pays for this? The citizens in my district, my constituents that decide to go to Minneapolis – maybe go out to a restaurant for the night,” she said. “They don’t get to see the benefit on a day-to-day” basis.
Added Davids: “Why should Minneapolis be treated differently than other convention centers around the state?”
But Minneapolis officials said that the convention business that comes to Minneapolis produces millions in tax dollars for the state, and that eliminating the special taxes would force city residents to pay for the convention center through property taxes.
“There’s not a [major] convention center like this across the country that is self supporting, that I know of,” said Rybak.Comment: MSP Convention Center
2.14.2012
In praise of Dave's Barber Shop
Taxpayers fleeced in bailout of Senate barbershop ‘institution’
America’s most distinguished leaders get their hair cut at the Senate barbershop, but taxpayers are the ones really getting clipped.
The barbershop ran almost $300,000 in the red last year but received an infusion from Senate coffers that is keeping it in business, the Senate sergeant at arms, Terrance Gainer, told The Daily.
A federal bailout isn’t that unusual since the economic downturn, but some senators didn’t even know their salon was in hot water — and don’t think it should be, considering what they pay for a little off the ears.
A shampoo, cut and blow dry is $27 and highlights are $105, according to the barbershop’s website.Comment: My regular barber is my wife and a 10 year old Wahl clipper. Kathee does a super job: shaves around the ears and uses the razer on my neck. Plus she trims my eyebrows. Every now and then she is too busy to cut my hair and I find myself at Dave's Barbershop. They manage to give me a decent haircut for $ 12. (cash only ... no credit cards!). AND they manage to do this without taking a government subsidy!
2.13.2012
Abraham Lincoln's favorite poem: morbid but instructive
With Death on His Mind
Excerpt:
On the evening of March 25, 1864, Abraham Lincoln sent his young son Tad to fetch a copy of Shakespeare's plays from the White House library. With the volume in hand, the president recited passages to an audience of one: Francis Bicknell Carpenter, a painter who was working on "First Reading of the Emancipation Proclamation of President Lincoln," a portrait that now hangs in the Capitol.
After a while, Lincoln set down the book. "There is a poem that has been a great favorite with me for years," he said. Then he closed his eyes and declaimed 56 lines. He knew the words, but nothing else of the poem. "I would give a great deal," he said, "to know who wrote it, but I never could ascertain."
The author was William Knox and the title was "Mortality," though it was perhaps better known by its first line, "O why should the spirit of mortal be proud!" The theme is death, the great leveler that touches saints and sinners, kings and beggars, parents and children. Today, poet and poem would be almost entirely forgotten but for their connection to Lincoln.
Knox was born in Scotland in 1789. A descendant of John Knox, the 16th-century Protestant reformer, he showed a flair for verse at a young age but went into farming. He wasn't very good at it, possibly because he drank too much, and abandoned agriculture after five years. What he really wanted to do was write. His first collection of poems, "The Lonely Hearth," appeared in 1818. Two more followed: "The Songs of Israel," which includes "Mortality," in 1824 and "The Harp of Zion" in 1825.
The final book almost didn't see print. A publisher lost the manuscript, forcing Knox to spend several days rewriting its 65 poems in an impressive feat of recall. A few months later, Knox suffered a stroke and died at the age of 36. Sir Walter Scott eulogized him as "a young poet of considerable talent." Robert Southey, England's poet laureate at the time, also admired Knox.
Yet it was a former backwoodsman from the U.S. who kept Knox's words alive, helping the poet become a literary one-hit wonder. In 1831, a friend handed the then 22-year-old Lincoln a copy of "Mortality," untitled and anonymous, probably clipped from a newspaper. Lincoln had good taste in poetry, reading and memorizing works by Robert Burns and Lord Byron as well as Shakespeare. The obscure "Mortality," however, became the poem he liked best. "I would give all I am worth and go into debt to be able to write so fine a piece as I think that is," he wrote in 1846.Comments:
- Source of text of Mortality
- Source of above life mask.
- On William Knox
Oh, why should the spirit of mortal be proud? Like a swift-fleeting meteor, a fast-flying cloud, A flash of the lightning, a break of the wave, He passes from life to his rest in the grave.
The leaves of the oak and the willow shall fade, Be scattered around, and together be laid; And the young and the old, the low and the high, Shall molder to dust, and together shall lie.
The infant a mother attended and loved; The mother that infant's affection who proved; The husband, that mother and infant who blessed; Each, all, are away to their dwelling of rest.
The maid on whose cheek, on whose brow, in whose eye, Shone beauty and pleasure - her triumphs are by; And the memory of those who loved her and praised, Are alike from the minds of the living erased.
The hand of the king that the sceptre hath borne, The brow of the priest that the mitre hath worn, The eye of the sage, and the heart of the brave, Are hidden and lost in the depths of the grave.
The peasant, whose lot was to sow and to reap, The herdsman, who climbed with his goats up the steep, The beggar, who wandered in search of his bread, Have faded away like the grass that we tread.
The saint, who enjoyed the communion of Heaven, The sinner, who dared to remain unforgiven, The wise and the foolish, the guilty and just, Have quietly mingled their bones in the dust.
So the multitude goes - like the flower or the weed That withers away to let others succeed; So the multitude comes - even those we behold, To repeat every tale that has often been told.
For we are the same that our fathers have been; We see the same sights that our fathers have seen; We drink the same stream, we feel the same sun, And run the same course that our fathers have run.
The thoughts we are thinking, our fathers would think; From the death we are shrinking, our fathers would shrink; To the life we are clinging, they also would cling - But it speeds from us all like a bird on the wing.
They loved - but the story we cannot unfold; They scorned - but the heart of the haughty is cold; They grieved - but no wail from their slumber will come; They joyed - but the tongue of their gladness is dumb.
They died - aye, they died - we things that are now, That walk on the turf that lies over their brow, And make in their dwellings a transient abode, Meet the things that they met on their pilgrimage road.
Yea, hope and despondency, pleasure and pain, Are mingled together in sunshine and rain; And the smile and the tear, the song and the dirge, Still follow each other, like surge upon surge.
'Tis the wink of an eye - 'tis the draught of a breath - From the blossom of health to the paleness of death, From the gilded saloon to the bier and the shroud Oh, why should the spirit of mortal be proud?
2.11.2012
How Microsoft tests
You might be wondering how we are testing WOA in our labs. For x86/64 we run massive labs (thousands of machines, real and virtualized) and highly automated test runs for every single daily build. WOA required us to reimagine our own lab and test processes. For testing x86/64, it is simple to just order thousands of rack-mounted servers, or even virtualize them; for ARM, there are no standard rack-mounted servers that can run WOA. Since we’re doing highly integrated hardware/firmware/software development, and virtualization is not helpful, we had to devise our own approach.
We consolidated hundreds of ARM development boards along with a custom I/O board into a rack assembly connected to our testing infrastructure. Our original design focused on density supporting 300 ARM devices in one rack, but we ultimately preferred the diagnostics and availability of a custom I/O board in the 1U setup. ... We designed our own 1U chassis that fits into a standard server rack. Either a full form-factor device or just the motherboard can be dropped into this chassis. Once fully assembled, the SoC board in conjunction with the IO board and chassis looks, feels and operates like a standard rack mount PC and fits right in with existing lab infrastructure.
Each 42U rack holds 32 WOA chassis plus network switches, debug host PC, and USB hubs. By March we will have over 100 fully populated racks for WOA testing.Comment: WOA (Windows on ARM) is Microsoft's Windows 8 operating system that will run on both ARM processors (think tablets) and x86/64. Video is worthwhile!
2.10.2012
"I've never seen so many men wasted so badly"
Excerpt:
“It’s such a basic thing,” he continued. “Your parents always tell you … when you don’t have a dollar in your pocket, you don’t spend two dollars. And that’s a basic philosophy of life. People think you can just put if off. If you put it off you just print more money, and the money in your pocket becomes devalued, and it’s not worth as much, and eventually it comes down to zero.”
Eastwood also weighed in on the Simpson-Bowles debate, saying he was “amazed” that President Obama ignored the recommendations of the co-chairs of the Simpson-Bowles deficit reduction commission: former Clinton chief of staff Erskine Bowles and Alan Simpson, a former Republican senator from Wyoming. “They came back with a recommendation, which was to exactly stop spending, and then everyone said that’s enough from you guys, go home,” Eastwood said. “I thought, that’s a waste of money, a waste of time, a waste of effort from everybody, and not very spirited for the country. I think both those gentlemen are smart and worth listing to, if you’ve gone ahead and assigned them to this project.”Comment: Image: Clint from The Good, the Bad and the Ugly. Quote (in post title) ... Blondie
JFK and the sex thing
Excerpt:
I knew that John F. Kennedy was a compulsive, even pathological adulterer, given to taking outlandish risks after he entered the White House. I knew he treated women like whores. And I knew he had more than a few issues with his father about toughness and manliness and all that. But before I read in the newspaper that Mimi Alford's just-released memoir, Once Upon A Secret: My Affair With President John F. Kennedy And Its Aftermath, described giving Dave Powers a b*** job at JFK's request and in his presence, I didn't know that Kennedy had an appetite for subjecting those close to him to extreme humiliation.Comment: My brother gags whenever he hears the Kennedys called America's Royal Family. More on the story here. JFK makes Clinton look like a saint! And that isn't saying much!
Another reason BAC is not on my investment radar
Excerpt:
When the market goes up because of positive news about the economy, Bank of America stock shoots up past the stocks of other big banks. When traders get worried about Greek debt, Bank of America takes the biggest plunge.
The big swings are not driven by a fundamental bet that the bank will be more profitable because the economy is getting better or a real concern that it will lose more money than others if there is a default in Greece. Instead, Bank of America is the stock of the moment for high-frequency trading, the supercomputer-driven buying and selling that barely existed a few years ago and now accounts for as much as two-thirds of U.S. trading.
The bank's single-digit stock price and flood of shares on the market — three times as many as its nearest big-bank competitor — make it an attractive target for hedge funds and banks that employ high-powered, computerized trading.
"The movement of Bank of America stock on most days has nothing to do with Bank of America," says Joseph Saluzzi, co-founder of brokerage firm Themis Trading. In other words, the stock moves because it moves. Bank of America stock has risen or fallen 1 percent or more on 20 days this year. The Standard & Poor's 500 index has only done it three times.
For the year, Bank of America is up 46 percent, best of the 30 stocks that make up the Dow Jones industrial average. Big banks collectively are up 15 percent. In high-frequency trading, investors use computer algorithms to exploit small changes in a stock's price.
If a computer can seize on a stock like Bank of America a fraction of a second faster than the rest of the market, it can book a tiny profit. Those pennies add up over tens of millions of shares a day to produce big gains. And when computers rush to buy or sell a stock like Bank of America, it can result in accelerated moves in the stock price. Buying leads to more buying, selling to more selling. Bank of America is part of the Standard & Poor's 500, and therefore held in mutual funds in the retirement accounts of millions of Americans. And mutual fund managers hate high-frequency trading. Not only does it make the stocks in their portfolios more volatile, but fund managers fume that high-frequency computers can detect their stock orders, step in to change the price of a stock slightly and pocket a small profit. "It has nothing to do with the fundamentals," says Leon Cooperman, a billionaire investor, chairman of hedge fund Omega Advisors and former CEO of Goldman Sachs Asset Management.Comment: Trading and investing are not the same thing! An investor looks for the fundamentals and buys and holds to reap the rewards. A better bank investment would be US Bank. The above image is not my trading desk!
I'm conflicted: Stocks vs Bonds
Excerpts:
According to a Bloomberg News report, renowned fund manager Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management, has increased his holdings of Treasuries to the highest level since July 2010, while billionaire investor Warren Buffett calls bonds “dangerous” destroyers of purchasing power for investors.
Gross, who has earned the title “the Bond King”' for his mastery over the bond market, has boosted U.S. government and Treasury debt to 38 percent of assets in Pimco’s $250.5 billion Total Return Fund from 30 percent in December, Bloomberg reported.
Buffett, another investment guru with a faithful following, said Thursday in an adaptation from his upcoming shareholder letter posted on Fortune magazine’s website that taxes and inflation should deter investors from buying debt. “They are among the most dangerous of assets,” Buffett wrote. “High interest rates, of course, can compensate purchasers for the inflation risk they face with currency-based investments -- and indeed, rates in the early 1980s did that job nicely. Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume. Right now bonds should come with a warning label.” Buffett also notes that “over the past century these instruments have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.”Comments: My wife and I have the conversation. She is more risk adverse (which is good thing) and takes the Bonds side. I'm more with Warren Buffett on this. We do have some PIMCO FUNDS TOTAL RETURN FUND (kind of a toe in the water investment). We also have some AGG and BND (both bond ETFs). My case to my wife: Blue chip dividend paying equities are safe and they pay 2.5-3.5% (Consider GE which has a yield of 3.5%). Something to think about with dividends is that debt payments take priority over dividend payouts. So in general a bond from a given company is safer than a dividend paying common stock from the same company. My own view is that if one is going to invest in bonds, a bond fund or a bond ETF is the easiest way to go and risk is spread broadly. Investment advisors recommend that the closer one is to retirement, the higher bond allocation should be in one's plan. Consider the VANGUARD TARGET RETIREMENT 2015 (VTXVX). The yield is not exactly exciting at 2.45%. But it is a fairly safe investment. The asset allocation is 43% bonds (image below) Kathee and I are probably at about 20% bonds and our target date is 2015. My concern is that I target at least a 5% return and the 2015 plan doesn't achieve that. Image above is from Needmoney.com
2.09.2012
2.07.2012
Forbes features Wells Fargo
- Wells Fargo: The Bank That Works (Forbes, Feb. 13, 2012)
- The Art Of The Cross-Sell (Forbes, Feb. 13, 2012)
- The Gospel According To Wells Fargo (Forbes, Feb. 13, 2012)
2.06.2012
Taiwan’s Animation Aces Storyboard the Super Bowl
Taiwan’s Animation Aces Storyboard the Super Bowl
Excerpt:
After a brief debate over using a Transformer motif, the team decides on a steamroller, driven by Patriots quarterback Tom Brady. He crushes players representing different teams. The seemingly unstoppable 16-0 Patriot juggernaut is finally stopped when it’s blown to bits by Eli Manning, another Giants player, and the Statue of Liberty, whose torch becomes a flame thrower. That settled, the writers quickly turn out the rest of the scenes, tossing ideas back and forth in a newsroom setting and writing over each other on a shared Google document. Attaching to the idea that fate brought the two teams together again, and that the underdog Giants won again, the writers bring God into the picture. He pushes aside the once-favored Denver Broncos’ quarterback Tim Tebow, himself a star in a viral animation earlier this season, to elevate Manning and Brady.Comment: You may need to read the article and then watch the animation several times!
2.05.2012
Iran - Israel brinkmanship
Calling Israel a danger to Islam, the conservative website Alef, with ties to Iran’s supreme leader, Ayatollah Ali Khamenei, said the opportunity must not be lost to remove “this corrupting material. It is a ‘jurisprudential justification” to kill all the Jews and annihilate Israel, and in that, the Islamic government of Iran must take the helm.” The article, written by Alireza Forghani, a conservative analyst and a strategy specialist in Khamenei’s camp, now is being run on most state-owned conservative sites, including the Revolutionary Guards’ Fars News Agency, showing that the regime endorses this doctrine. Because Israel is going to attack Iran’s nuclear facilities, Iran is justified in launching a pre-emptive, cataclysmic attack against the Jewish state, the doctrine argues. On Friday, in a major speech at prayers, Khamenei announced that Iran will support any nation or group that attacks the “cancerous tumor” of Israel. Though his statement was seen by some in the West as fluff, there is substance behind it. Iran’s Defense Ministry announced this weekend that it test-fired an advanced two-stage, solid-fuel ballistic missile and boasted about successfully putting a new satellite into orbit, reminding the West that its engineers have mastered the technology for intercontinental ballistic missiles even as the Islamic state pushes its nuclear weapons program.Response: Netanyahu: Only Strength Guarantees Security Excerpt:
“In such a region, the only thing that ensures our existence, security and prosperity is our strength,” Netanyahu told his Cabinet in Jerusalem in remarks broadcast on Israel Radio. “We are obligated to continue to develop the military, economic and social strength of the state of Israel.” Israeli leaders have been warning publicly that time is running out for a military strike that could stop Iran from developing nuclear weapons.Comment: Image: Doomsday Clock. If Israel preemptively strikes - can you blame them?!
2.04.2012
On the value of Superbowl commericials
Eight Brands That Wasted the Most on the Super Bowl
Excerpt:
E*TradeComment: I love the E-Trade commercials. I use Wells-Trade. When was the last time you saw a Wells-Trade commercial?
E*Trade (NASDAQ: ETFC) has run Super Bowl ads in the past five years, as well as in 2002, attempting to make headway against larger online trading competitors Fidelity Investments, Charles Schwab and TD Ameritrade. With an average of two and a half ads per game, E*Trade has run 6.75 minutes of Super Bowl ads over the past 10 years. Although the company’s ad campaigns have varied, its most popular commercial is the E*Trade talking baby, which debuted during Super Bowl XLII in 2008. Although that ad resulted in a record-breaking number of new accounts for the company, E*Trade’s overall share price has decreased 91.1% since February 2002.
- Total ad spending (2002 – 2011): $35.9 million
- Super Bowls advertised in over past 10 years: 6
- Average ads per Super Bowl: 2.5
- Change in share price (2002 – current): -91.1%
- Change in market share: n/a
The Myth of Jobs and Stadiums
Lucas Oil Stadium, where the Colts play eight regular season games per year, has every amenity: a retractable roof, state-of-the-art turf, seven locker rooms, 137 luxury suites, 1,000 flat-screen televisions.
And well it should: It cost $720 million to build. Of this, the Colts paid only $100 million. To cover the rest, local officials raised taxes on hotels, restaurants and rental cars, and issued bonds that soon led to ballooning financing costs.
As Bloomberg News reported Feb. 2, the cost overruns resulted partly from the city’s reliance on auction-rate securities, which became extremely expensive as the market for such bonds collapsed in 2008. Interest rates on some of the stadium bonds reached 15 percent at one point, according to data compiled by Bloomberg.
All told, this led to about $43 million in unexpected financing costs. As projected deficits grew larger, the county board that operates the stadium had to reduce arts and cultural grants, and the city increased taxes on hotels even further.
... And the debts linger: From the Kingdome in Seattle to the Astrodome in Houston to the old Giants Stadium in New Jersey, today’s taxpayers are on the hook for tens of millions of dollars in debt for stadiums that are no longer in use or no longer even exist. The RCA Dome -- which Lucas Oil Stadium replaced, and which was imploded in 2008 -- won’t be paid off until 2021.Comment: Read the full article. I oppose public financing of stadiums. If a team threatens to walk ... let 'em!
Let's hear it for Muncie!
Excerpt:
Bulldozing its way through a high-profile dispute over wages, Caterpillar Inc. said Friday it will close a 62-year-old plant in London, Ontario, that makes railroad locomotives, eliminating about 450 manufacturing jobs that mostly paid twice the rate of a U.S. counterpart. Caterpillar's decision, ending a standoff with locked-out workers huddled around barrels of burning scrap wood outside the London factory gates, may benefit another downtrodden manufacturing city: Muncie, Ind., where Caterpillar last year opened a locomotive plant and where it is trying to fill jobs at about half the pay workers in Ontario received.
At a job fair in Muncie Saturday, Caterpillar will be offering jobs at that plant at wages ranging from $12 to $18.50 per hour. Wages for most workers at the Ontario plant are about 35 Canadian dollars an hour (US$35.03). "The cost structure of the operation (in Ontario) was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful," Caterpillar said in a statement Friday morning. It added: "The gulf between the company and the union was too wide to resolve."
... Caterpillar's announcement came on the same day Canada released much-worse-than-expected jobs data, underscoring its tenuous economy. Canadian employers hired far fewer workers than expected in January, adding just 2,300 net new jobs, and the jobless rate rose unexpectedly from 7.5% to 7.6%, the highest level since April 2011, Statistics Canada said.
... Caterpillar has made clear it hopes to avoid any union representation at the Muncie plant. Last year, an online job advertisement published by the company sought human-resources managers with "experience with providing union-free culture and union avoidance." In an effort to attract more union-shy employers, Indiana Gov. Mitch Daniels on Wednesday signed a "right-to-work law," barring labor contracts that require all workers to pay union dues. Mr. Julian, the county economic-development official, said site-selection experts for manufacturing plants have told him that about 30% of such projects specify that the factories go to states with right-to-work laws. "We obviously want to compete for those," he said. Indiana this week became the 23rd state with such a law and the first to enact one since Oklahoma did a decade ago.Comments: Image source. This week Republicans in Minnesota introduced the "right to work" concept as a constitutional amendment. Would be good for Minnesota!
2.02.2012
Some QB's make better Congressman!
Excerpt:
In 1994, the Washington Redskins thought they had identified their next great quarterback when they invested the No. 3 overall draft pick in the 1994 draft in selecting Heath Shuler. Shuler started eight games for the Redskins in 1994 and wasn't terrible, as he came up with 10 touchdown passes to just 11 interceptions, showing a degree of promise. Sadly for Shuler and the Redskins, Shuler never took the next step up and instead regressed. Shuler only received five more starts over the next two years in Washington, and then his career as a Redskins player was done. His starting record was 4-9.Comment: He is a good congressman! A Blue Dog democrat!
Facebook: From social network to social disease?
3 Ways Facebook Plans to Exploit Users
Excerpt (2 of the three):
- Facebook is going to "sell" users for $120 each According to their filing, Facebook had 850 million Monthly Active Users (MAU) at the end of 2011. From that user base the company generated roughly $3.7b in revenue, or just under $4.50 for every member. Nearly 90% of this number comes from selling your information to advertisers who, in turn, try to sell you things Facebook says you want. That may seem like a reasonable trade until we get to the IPO. "If this thing goes public at the price they're expecting (Facebook) will get $120 per user," Matt Nesto notes. Said another way, Facebook is going to sell you for 120 bucks. Wall Street bankers will get a cut of this figure, with Facebook getting the bulk of the money. FB users get nothing.
- Facebook users are about to become billboards In the first line of a 2,000 word letter from Mark Zuckerberg, the Facebook founder announces the following: "Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected." Noble stuff from a guy about to be worth nearly $30 billion. Regardless of the original inspiration, once Facebook goes public Zuckerberg's job is to create value for shareholders. That means getting more than $4.50 a year for selling each user's information to advertisers. One of the ways Facebook is going to go about this value extraction is turning your every click into a sponsorship. If you feel exploited now you ain't seen nothing yet. Post-IPO, everything you "Like", suggest or link is going to be packaged and sold. Anyone you "Friend" will be pitched stuff you like. People with whom you have common friends will be sold goods on the basis of your unwitting recommendation. You won't just be connecting with people anymore, you'll be infecting them with spam, pop-ups, and network. If that sounds something like a social disease it's because that's exactly what it is.
Comment: Gives one pause!
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